Knowledge Center

The Health Insurance Marketplace has begun sending notices to employers where at least one employee enrolled in the Exchange/Marketplace and who was determined to be eligible for an advance premium tax credit (APTC) or cost sharing reduction (CSR). This employee has reported to the Marketplace that they were NOT offered minimum affordable coverage by their employer.

If you are an applicable large employer and find yourself in this situation, you may have recently received a Health Insurance Marketplace letter stating that the employee was determined eligible for subsidized Marketplace coverage.

If you believe the employee was offered appropriate coverage, there is time to appeal.
Employers have 90 days from the date of the notice to file an appeal. This appeal will NOT determine if your organization has to pay the Employer Shared Responsibility Payment. Only the Internal Revenue Service (IRS) can determine which employers are subject to the Employer Shared Responsibility Payment as stated under section 4980H of the Internal Revenue Code.

IMPORTANT: For 2015, the Employer Shared Responsibility Payment will generally apply to employers with 100 or more full-time equivalent (FTE) employees, and may apply to certain employers with 50 or more FTE employees. Starting in 2016, the Employer Shared Responsibility Payment will apply to employers with 50 or more FTE employees.

Employer Action Points:

1. If appealing a Marketplace determination, it is recommended to provide the least amount of detail required to respond.

2. It is important to remember that any retaliation or discrimination against an employee because he/she received subsidized Marketplace coverage is prohibited.

3. Create a policy surrounding Marketplace notices and which members of your Human Resources team should review and respond. Consider creating a firewall between those responding to notices and those making employment decisions.

Yesterday, the Department of Labor published the much anticipated changes to the Overtime Rule. They have posted a wealth of information for employers. The link below is a good place to start — the DOL offers a quick overview and a video.

On Wednesday, the Department of Labor and the Centers for Medicare and Medicaid (CMS) posted the new and improved Summary of Benefits and Coverage form. The SBC was designed to help employees compare benefit provisions and make educated decisions when shopping for a medical plan. However, employers provided feedback indicating confusion among SBC recipients.

The CMS press release explains “The SBC includes coverage examples that demonstrate the cost sharing amounts an individual might be responsible for in three common medical situations. In addition to the current coverage examples that address diabetes care and childbirth, the updated template has a new coverage example that addresses coverage for a foot fracture so that a consumer understands what a plan covers in an emergency scenario.

Changes have also been made to the SBC to improve readability for consumers. The new templates include more information about cost sharing, such as enhanced language to explain deductibles and a requirement that plans address individual and overall out-of-pocket limits in the SBC.”

These enhancements, including hyperlinks to the definitions section in electronic versions, should make reading the SBC a bit easier come open enrollment time.

Most employers will begin to use this new template on the first day of the first open enrollment period that begins on or after April 1, 2017.

To access the existing SBC template, or to review the new one, visit the DOL website via the link below.

All group health plans that provide prescription drug coverage to Medicare Part D eligible individuals (whether actively working, retired, or disabled) are required to notify CMS whether or not the Rx coverage offered by the employer is “creditable” within 60 days of the start of the plan year.

For plan sponsors that renew January 1, disclosure are due to CMS by March.

This disclosure is required whether the coverage is primary or secondary to Medicare. Employers must file their Disclosure Notice through the CMS website. It only takes a few minutes to complete the disclosure and remain in compliance.

Good news arrived from the IRS just in time for the New Year. On December 28th, the IRS released Notice 2016-4 providing additional time for employers to comply with upcoming ACA reporting requirements.

The deadline to provide Form 1095 to employees has been pushed to March 31, 2016. The extension provides roughly nine additional weeks for employers to prepare and distribute the forms to full time employees who received an offer of coverage in 2015.

Deadlines for filing with the IRS have also been extended. If filing paper copies of Form 1094 (Transmittal of Health Coverage Information Returns) along with fewer than 250 copies of Form 1095, the deadline has been shifted from February 29, 2016 to May 31, 2016. If filing electronically with the IRS through the AIR system, employers now have until June 30, 2016 to transmit their forms.

The IRS indicated “automatic and permissive extensions of time for filing information returns…will not apply to extended due dates.” The service also encouraged employers to “furnish statements and file the informational returns as soon as they are ready.”

ACA Reporting Seminar

Please note: This communication is designed for introductory informational purposes. The contents are summaries and are not intended to cover every aspect of the topic, law or regulation being discussed. The information contained in this post and website does not constitute legal or tax advice. To ensure full compliance based on your unique organizational requirements, discussion with your attorney or tax professional is recommended.

Finally, some good news for employers when it comes to ACA compliance. Today, President Obama signed the Bipartisan Budget Act of 2015. Included, was a provision repealing the auto-enrollment requirement for organizations with over 200 employees.

This change comes as a relief for most large employers. Fears of “defaulting” employees into a medical plan they didn’t want were a significant cause of stress. Thankfully, there’s one less thing to worry about or implement.

Please note: This communication is designed for introductory informational purposes. The contents are summaries and are not intended to cover every aspect of the topic, law or regulation being discussed. The information contained in this post and website does not constitute legal or tax advice. To ensure full compliance based on your unique organizational requirements, discussion with your attorney or tax professional is recommended.

If your organization has an office in New York City, it’s time to review your benefits package. Effective January 1, 2016, companies with 20 or more employees in NYC must offer a pre-tax transportation benefit.

The new legislation does not apply to every employer. Your organization may be exempt if you:

are Federal, State or Local Government

are not required to pay federal or state taxes

have a collective bargaining agreement in place that meets certain guidelines

Is your organization digging into your benefits data yet? We are only a few weeks away from the compliance deadlines imposed by the Affordable Care Act (ACA).

For the current 2015 tax year, Applicable Large Employers (ALEs) with 50 or more Full Time or Full Time Equivalent employees must file new forms with the IRS and provide them to employees to be in compliance with the ACA.

Form 1094 and 1095

Form 1094 is titled “Transmittal of Employer Provided Health Insurance Offer and Cover Information Returns.” While the title is long, it will likely prove to be the easier of the forms to complete. It provides data about the employer, the months where “Minimum Essential Coverage” was offered, the number of full time employees, and whether the employer qualifies for Transition Relief (50-99 lives).

Form 1095 titled “Employer-Provided Health Insurance Offer and Coverage Insurance” is far more onerous. This is the form that must be provided to each full time employee that was eligible for coverage, AND any part time employees (under 30 hours a week) who elected medical benefits. Coverage, cost, and appropriate codes must be detailed BY MONTH for each employee.

Below is an example of the data required for a Fully Insured Health Plan:

Employee Example:

Tina was a full time employee at XYZ Company during part of tax year 2015. She was enrolled in the Health Plan from January 1 through February 28, 2015 and when she terminated employment. Tina’s Form 1095-C would need to indicate she received an offer of coverage on line 14 for January and February. (XYZ Company might use Code 1C – coverage offered to Tina and all dependents.) The remaining 10 months on the form would require a different code be utilized to show no qualifying offer was made (Code 1H).

Self Insured Plans Require More Data

If your medical plan is self-insured, employers have an additional data reporting burden. Spousal and dependent data is required to be reported by month on form 1095, not just employee data.

Transmission to the IRS

Form 1094 and copies of every Form 1095 provided to employees must be transmitted to the IRS. If the employer produces 250 or more returns, you MUST file electronically through a special system the IRS has created called AIR (ACA Information Returns.) If you are required to file electronically and fail to do so, you can be penalized $250 per paper return in excess of the 250 threshold. These fines can add up quickly.

Please note: This communication is designed for introductory informational purposes. The contents are summaries and are not intended to cover every aspect of the topic, law or regulation being discussed. The information contained in this post and website does not constitute legal or tax advice. To ensure full compliance based on your unique organizational requirements, discussion with your attorney or tax professional is recommended.

Every year, the IRS announces important plan limits for High Deductible Health Plans, Health Savings Accounts, Flexible Spending Accounts and 401(k) plans. Important limits for 2016 are summarized below.

Flexible Spending Accounts:

The maximum deferral to a Medical Flexible Spending Account remains at $2,250.

Qualified Transportation Benefits

2016 Limits

Change from 2015

Commuter vehicle and transit pass

$130

No change

Qualified Parking

$255

+$5

High Deductible Health Plans

For 2016, the IRS has indicated the minimum deductibles for a plan to be considered “qualified” remain unchanged, however, the Maximum Out of Pocket limits have increased.

2016 Limits

Change from 2015

HDHP minimum deductibles

$1,300 single only

$2,600 family

No changes

HDHP out of pocket maximum

$6,650 single only

$13,100 family

+$100 single only

+$200 family

HSA Contribution Limits

$3,350 single only

$6,750 family

Combination of employer and employee contributions

No change single only

+$100 family

Please keep in mind, the out of pocket limits listed by the Affordable Care Act are higher than the permissible IRS maximums. To qualify for a Health Savings Account, OOP Maximums may not be higher than those listed above.

Is your single HDHP deductible greater than $6,650 for 2016?

If so, you may need to make plan design changes to allow an embedded self-only deductible for those electing family plans to comply with the ACA.

Retirement Plan Maximums

On October 21,2015 the IRS announced limits for 401k plans will remain the same for 2016.